G.R. No.

L-23002

July 31, 1967

CONCEPCION FELIX VDA. DE RODRIGUE , plaintiff-appellant, vs. GERONI!O RODRIGUE ., E" AL., defendants-appellees. Ozaeta, Gibbs and Ozaeta for plaintiff-appellant. Sycip, Salazar, Luna and Associates and Carolina C. Grio-Aquino for defendants-appellees. RE#E$, J.%.L., J.: This is an appeal by Concepcion Felix Vda. de Rodriguez from the decision of the Court of First nstance of !ulacan in Civil Case "o. #$%$, &hich she commenced on 'ay #(, )*%#, to secure declaration, of nullity of t&o contracts executed on +anuary #,, )*-, and for recovery of certain properties. The facts of this case may be briefly stated as follo&s. Concepcion Felix, &ido& of the late /on Felipe Calderon and &ith &hom she had one living child, Concepcion Calderon, contracted a second marriage on +une #0, )*#*, &ith /omingo Rodriguez, &ido&er &ith four children by a previous marriage, named 1eronimo, 2smeragdo, +ose and 'auricio, all surnamed Rodriguez. There &as no issue in this second marriage. 3rior to her marriage to Rodriguez, Concepcion Felix &as the registered o&ner of # fishponds located in the barrio of !aba4gad, municipality of !ulacan, !ulacan province. &ith a total area of $$5,5)) s6uare meters covered by 7CT "os. %0$ and (05. 8nder date of +anuary #,, )*-,, Concepcion Felix appeared to have executed a deed of sale conveying o&nership of the aforesaid properties to her daughter, Concepcion Calderon, for the sum of 3#,$00.00, &hich the latter in turn appeared to have transferred to her mother and stepfather by means of a document dated +anuary #5, )*-,. !oth deeds, notarized by "otary 3ublic +ose /. 'endoza, &ere registered in the office of the Register of /eeds of !ulacan on +anuary #*, )*-,, as a conse6uence of &hich, the original titles &ere cancelled and TCT "os. )-()$ and )-()% &ere issued in the names of the spouses /omingo Rodriguez and Concepcion Felix.

7n 'arch %, )*$-, /omingo Rodriguez died intestate, survived by the &ido&, Concepcion Felix, his children 1eronimo 2smeragdo and 'auricio and grandchildren 7scar, +uan and 9na, surnamed Rodriguez, children of a son, +ose, &ho had predeceased him. 7n 'arch )%, )*$-, the above-named &ido&, children and grandchildren of the deceased entered into an extra-:udicial settlement of his ;/omingo<s= estate, consisting of one-half of the properties allegedly belonging to the con:ugal partnership. 9mong the properties listed as con:ugal &ere the t&o parcels of land in !ulacan, !ulacan, &hich, together &ith another piece of property, &ere divided among the heirs in this manner. >?2R29@, the parties have furthermore agreed that the fishpond covered by TCT "os. )-()$, )-()% and #,)0* of the 7ffice of the Register of /eeds of !ulacan, containing an area of $$5,*5) s6. m., &hich is liAe&ise the con:ugal property of the deceased and his surviving spouseB )C# of the same or #5(,*($.$ s6. m. belongs to said Concepcion Felix Vda. de Rodriguez, as her share in the con:ugal propertyB and -C, of the remaining half or #0*,#-*.)#$ s6. m. are transferred in full o&nership to 1eronimo Rodriguez, 2smeragdo Rodriguez and 'auricio Rodriguez, share and share aliAe, &hile the other )C, or %*,5,%.-5$ s6. m. of the said remaining half goes in e6ual shares to 7scar Rodriguez, +uan Rodriguez and 9na Rodriguez. 9s a result of this partition, TCT "os. )-()$ and )-()% &ere cancelled and TCT "os. T-)),-) and T-),,-# &ere issued in the names of the said heirs of the deceased. 7n 'arch #-, )*$-, in a po&er of attorney executed by the children and grandchildren of /omingo Rodriguez, Concepcion Felix Vda. de Rodriguez &as named their attorney in-fact, authorized to manage their shares in the fishponds ;2xh. ,=. 7n +uly #, )*$,, the heirs ended their co-o&nership by executing a deed of partition, dividing and segregating their respective shares in the properties, pursuant to a consolidation and subdivision plan ;3C@--50#=, in accordance &ith &hich, Concepcion Felix Vda. de Rodriguez obtained TCT "o. T-)#*)0, for the portion pertaining to her ;2xh. D=, &hile TCT "o. T-

)#*)) &as issued to the other heirs, for their shares. This latter title &as subse6uently replaced by TCT "o. )%%%0 ;2xh. '=. 7n 7ctober )#, )*$,, the Rodriguez children executed another document granting unto the &ido& lifetime usufruct over one-third of the fishpond &hich they received as hereditary share in the estate of /omingo Rodriguez, &hich grant &as accepted by Concepcion Felix Vda. de Rodriguez. Then, in a contract dated /ecember )$, )*%), the &ido& appeared to have leased from the Rodriguez children and grandchildren the fishpond ;covered by TCT "o. )%%%0= for a period of $ years commencing 9ugust )%, )*%#, for an annual rental of 35,)%).-5 ;2xh. $=.
1 p!"1.#t

9t about this time, it seemed that the relationship bet&een the &ido& and her stepchildren had turned for the &orse. Thus, &hen she failed to deliver to them the balance of the earnings of the fishponds, in the amount of 3-,000.00, her stepchildren endorsed the matter to their la&yer &ho, on 'ay )%, )*%#, sent a letter of demand to the &ido& for payment thereof. 7n, 'ay #(, )*%#, Concepcion Felix Vda. de Rodriguez filed the present action in the Court of First nstance of 'anila naming as defendants, 1eronimo Rodriguez, 2smeragdo Rodriguez, 7scar Rodriguez, Concepcion !autista Vda. de Rodriguez, as guardian of the minors +uan and 9na Rodriguez, and 9ntonio /iaz de Rivera and Renato /iaz de Rivera, as guardians of the minors 'aria 9na, 'ercedes, 'argarita, 'auricio, +r. and /omingo ;Children of 'auricio Rodriguez &ho had also died=. The action to declare null and void the deeds of transfer of plaintiff<s properties to the con:ugal partnership &as based on the alleged employment or exercise by plaintiff<s deceased husband of force and pressure on herB that the conveyances of the properties E from plaintiff to her daughter and then to the con:ugal partnership of plaintiff and her husband E are both &ithout considerationB that plaintiff participated in the extra:udicial settlement of estate ;of the deceased /omingo Rodriguez= and in other subse6uent deeds or instruments involving the properties in dispute, on the false assumption that the said properties had become con:ugal by reason of the execution of the deeds of transfer in )*-,B that laboring under the same false assumption, plaintiff delivered to defendants, as income of the properties from )*$% to )*%), the total amount of

3$%,*5%.$(. 9s alternative cause of action, she contended that she &ould claim for her share, as surviving &ido&, of )C$ of the properties in controversy, should such properties be ad:udged as belonging to the con:ugal partnership. Thus, plaintiff prayed that the deeds of transfer mentioned in the complaint be declared fictitious and simulatedB that the F2xtra:udicial @ettlement of 2stateF be also declared null and voidB that TCT "o. )%%%0 of the Registry of /eeds of !ulacan be cancelled and another one be issued in the name of plaintiff, Concepcion Felix Vda. de FelixB that defendants be ordered to pay plaintiff the sum of 3$%,*5%.$(, &ith legal interest thereon from the date of the filing of the complaint, and for appropriate relief in connection &ith her alternative cause of action. n their separate ans&ers, defendants not only denied the material allegations of the complaint, but also set up as affirmative defenses lacA of cause of action, prescription, estoppel and laches. 9s counterclaim, they asAed for payment by the plaintiff of the unpaid balance of the earnings of the land up to 9ugust )$, )*%# in the sum of 3-,000.00, for attorney<s fees and expenses of litigation. 7n 7ctober $, )*%-, :udgment &as rendered for the defendants. n upholding the validity of the contracts, the court found that although the t&o documents, 2xhibits 9 and !, &ere executed for the purpose of converting plaintiff<s separate properties into con:ugal assets of the marriage &ith /omingo Rodriguez, the consent of the parties thereto &as voluntary, contrary to the allegations of plaintiff and her &itness. The court also ruled that having taAen part in the 6uestioned transactions, plaintiff &as not the proper party to plead lacA of consideration to avoid the transfersB that contracts &ithout consideration are not inexistent, but are only voidable, follo&ing the ruling in the case of Concepcion $s. Sta. Ana ;(5 3hil. 5(5=B that there &as ratification or confirmation by the plaintiff of the transfer of her property, by her execution ;&ith the other heirs= of the extra:udicial settlement of estateB that being a voluntary party to the contracts, 2xhibits 9 and !, plaintiff cannot recover the properties she gave thereunder. 3laintiff<s alternative cause of action &as also re:ected on the ground that action for rescission of the deed of extra:udicial settlement should have been filed &ithin , years from its execution ;on 'arch )%, )*$-=. From the decision of the Court of First nstance, plaintiff duly appealed to this Court, insisting that the conveyances in issue &ere obtained through duress, and &ere inexistent, being simulated and &ithout consideration.

>e agree &ith the trial Court that the evidence is not convincing that the contracts of transfer from Concepcion Felix to her daughter, and from the latter to her mother and stepfather &ere executed through violence or intimidation. The charge is predicated solely upon the improbable and biased testimony of appellant<s daughter, Concepcion C. 'artelino, &hom the trial court, refused to believe, considering that her version of violence and harassment &as contradicted by !artolome 1ualberto &ho had lived &ith the Rodriguez spouses from )*)5 to )*$-, and by the improbability of Rodriguez threatening his stepdaughter in front of the "otary 3ublic &ho ratified her signature. Furthermore, as pointed out by the appealed decision, the charge of duress should be treated &ith caution considering that Rodriguez had already died &hen the suit &as brought, for duress, liAe fraud, is not to be lightly paid at the door of men already dead. ; Cf. 3revost vs. 1ratz, % >heat. G8.@.H ,(), ,*(B @inco vs. Donga, $) 3hil. $05=. >hat is more decisive is that duress being merely a vice or defect of consent, an action based upon it must be brought &ithin four years after it has ceasedB) and the present action &as instituted only in )*%#, t&enty eight ;#(= years after the intimidation is claimed to have occurred, and no less than nine ;*= years after the supposed culprit died ;)*$-=. 7n top of it, appellant entered into a series of subse6uent transactions &ith appellees that confirmed the contracts that she no& tries to set aside. Therefore, this cause of action is clearly barred. 9ppellant<s main stand in attacAing the conveyances in 6uestion is that they are simulated or fictitious, and inexistent for lacA of consideration. >e shall examine each purported defect separately. The charge of simulation is untenable, for the characteristic of simulation is the fact that the apparent contract is not really desired or intended to produce legal effects or in &ay alter the :uridical situation of the parties. Thus, &here a person, in order to place his property beyond the reach of his creditors, simulates a transfer of it to another, he does not really intend to divest himself of his title and control of the propertyB hence, the deed of transfer is but a sham. !ut appellant contends that the sale by her to her daughter, and the subse6uent sale by the latter to appellant and her husband, the late /omingo Rodriguez, &ere done for the purpose of converting the property from paraphernal to con:ugal, thereby vesting a half interest in Rodriguez, and evading the prohibition against donations from one spouse to another during coverture ;Civil Code of )((*, 9rt. )--,=. f

this is true, then the appellant and her daughter must have intended the t&o conveyance to be real and effectiveB for appellant could not intend to Aeep the o&nership of the fishponds and at the same time vest half of them in her husband. The t&o contracts of sale then could not have been simulated, but &ere real and intended to be fully operative, being the means to achieve the result desired. "or does the intention of the parties to circumvent by these contracts the la& against donations bet&een spouses maAe them simulated ones. Ferrara, in his classic booA, FDa @imulacion de los "egocios +uridicosF ;@p. trans, )*#%=, pp. *$, )0$, clearly explains the difference bet&een simulated transactions and transactions in fraude% le&is. 7tra figura 6ue debe distinguirse de la simulacion es el fraus le&is. Tambien a6ui se da una gran confusion 6ue persiste aun en la :urisprudencia, apegada tenazmente a antiguos errores. @e debe a !ahr el haber defendido con vigor la antitesis teorica 6ue existe entre negocio fingido y negocio fraudulento y haber atacado la doctrina comun 6ue hacia una mescolanza con los dos conceptos. @e confunde E dice ;#= E, el negocio in fraude% le&is con el negocio simuladoB aun6ue la naturaleza de ambos sea totalmente diversa. 2l negocio fraudulento no es, en absolute, un negocio aparente. 2s perfectamente serio. se 6uiere realmente. 2s mas, se 6uiere tal como se ha realizado, con todas las consecuencias 6ue correspondent a la forma :uridica elegida. 'uchas veces, estas consecuencias con incomodas para una u otra de las partes, aun6ue serian mucho mas incomodas las consecuencias 6ue lievaria consigo el acto prohibido. xxx xxx xxx

2l resultado de las precedentes investigaciones es el siguiente el negocio simulado 6uiere producir una aparienciaB el negocio fraudulente, una realidadB los negocios simulados son ficticios, no 6ueridosB los negocios in fraude% son serios, reales, y realizados en tal forma por las partes para conse6uir un resultado prohibido. la simulacion nunca es un medio para eludir la ley sino para ocultar su violation. Da transgresion del contenido verbal e inmediato de la norma se encubre ba:o el manto de un negocio licito, lo cual no altera

el caracter del contra le&e% a&ere. Tan verdad es, 6ue si se ha redactado una contra-escritura 6ue documentary y declara la verdadera naturaleza del negocio realizado, no 6ueda mas 6ue aplicar pura y simplementela prohibicion. Tambien el fraude 6uiere per:udicar la ley, pero emplea para ello medios diversos y sigue distintos caminus. "o oculta el acto exterior, sino 6ue lo de:a claro y visible, tratando de huir sesgadamente de la aplicacion de la ley merced a una artistica y sabia combinacion de varios medios :uridicos no reprobados. 9ppellant invoAes our decision in 'asquez $s. (orta, *( 3hil. ,*0, but to no purpose. The mortgage and foreclosure sale involved in that case &ere typical simulations merely apparent but not really intended to produce legal effects, as approved by the Court<s finding that the alleged creditor and buyer at the foreclosure sale F3orta himself ostensibly acAno&ledged by his inertia in allo&ing the doctor ;alleged mortgagor debtor= to exercise dominical po&er thereon &ithout any protest on his part.F ; cas. cit., p. ,*$=. "ot only this, but the mortgagor<s &ife, &hen her husband died, Ffound among his papers 3orta<s cancellation of the mortgage in his favor and the draft of the complaint for foreclosure.F 3lainly, the precedent cited is here inapplicable. >ere the t&o conveyances from appellant to her daughter and from the latter to the spouses Rodriguez void ab initio or inexistent for lacA of considerationI >e do not find them to be so. n the first transaction, the price of 3#,$00.00 is recited in the deed itself ;2xh. 9=B in the second ;2xh. !=, the consideration set forth is 3-,000.00. "o&, 9rticle )#5, of the Civil Code of )((* ;in force &hen the deeds &ere executed= provided that E n onerous contracts the cause is understood to be, for each contracting party, the prestation or pro%ise of a thing or service by the other. ;emphasis supplied.= @ince in each conveyance the buyer became obligated to pay a definite price in money, such undertaAing constituted in themselves actual causa or consideration for the conveyance of the fishponds. That the prices &ere not paid ;assuming ad ar&uendo that Concepcion 'artelino<s testimony, to this effect is true= does not maAe the sales inexistent for &ant of causa. 9s ruled in )nriquez de la Ca$ada $s. *iaz, -5 3hil. *(#, Fthe consideration

;causa= need not pass from one ;party= to the other at the time the contract is entered into x x x . The consideration need not be paid at the time of the promise. The one promise is a consideration for the other.F >hat &ould invalidate the conveyances no& under scrutiny is the fact that they &ere resorted to in order to circumvent the legal prohibition against donations bet&een spouses contained in 9rticle )--,, paragraph ), of the Civil Code of )((*, then prevailing. That illegal purpose tainted the contracts, for as held by the @panish Tribunal @upreme in its decision of # 9pril )*,). ha de ser reputado ineficaz, por exigencias includibles del caracter social y moral del /erecho, todo contrato 6ue persiga un fin ilicito o immoral, sea cual6uiera el medio empleado por los contratantes para lograr esa finalidad, no :ustificada por un interes digno de ser socialmente protegido. The illicit purpose then becomes ille&al causa &ithin the terms of the old Civil Code, for as declared by the same @panish Court in its decision of ), /ecember )*,0 E toda vez 6ue lo 6ue caracteriza fundamentalmente la ilicitud de la causa es la lesion de un interos general :uridica % moral. a ruling reiterated in the decision of # 9pril )*,) &hen the Court ruled. 2l concepto de la causa ilicita, tal como la desenvuelve y aplica con gran amplitud y flexibilidad la doctrina moderna, permite cobi:ar, no solo las convenciones ilicitas por razon de su ob:eto o de su motivo ... sino tambien multiples convenciones 6ue no encerrando en si ningun elemento de directa anti:uricidad son ilicitas por el matiz immoral 6ue reviste la operation en su con:unto x x x . 8nfortunately for herein appellant, in contracts invalidated by illegal sub:ect matter or illegal causa, 9rticles )-0$ and )-0% of the Civil Code then in force apply rigorously the rule in pari delicto non oritur action, denying all recovery to the guilty parties inter se. 9nd appellant is clearly as guilty as her husband in the attempt to evade the legal interdiction of 9rticle )--, of the Code, already cited. >herefore, her present action to reivindicate the, conveyed properties &as correctly repulsed by the Court belo&.

9rt. )-0%. f the act &hich constitutes the illicit consideration is neither a crime nor a misdemeanor, the follo&ing rules shall be observed. ). >hen both parties are guilty, neither of them can recover &hat he may have given by virtue of the contract, or enforce the performance of the undertaAing of the other partyB xxx xxx xxx

That 9rticle )-0% applies to cases &here the nullity arises from the illegality of the consideration or the purpose of the contract &as expressly recognized by this @upreme Court in Gustilo $s. +ara$illa, ,( 3hil. ,,*,$0.# Finally, it cannot be denied that plaintiff-appellant had Ano&ledge of the nullity of the contract for the transfer of her properties in )*-,, because she &as even a party thereto. 9nd yet, her present action &as filed only on 'ay #(, )*%# and after the breaAing up of friendly relations bet&een her and defendants-appellees. 9ppellant<s inaction to enforce her right, for #( years, cannot be :ustified by the lame excuse that she assumed that the transfer &as valid. Jno&ledge of the effect of that transaction &ould have been obtained by the exercise of diligence. gnorance &hich is the effect of inexcusable negligence, it has been said, is no excuse for laches. ;1o Chi 1un, etc., et al. vs. Co Cho, et al., 1.R. "o. D-$#0(, Feb. #(, )*$$=. 2ven assuming for the saAe of argument that appellant held her peace, during the lifetime of her husband, out of legitimate fear for her life, there is no :ustification for her future to bring the proper action after his death in )*$-. nstead, she entered into a series of agreements &ith herein appellees, the children of her husband by a prior marriage, of partition, usufruct and lease of their share in the fishponds, transactions that necessarily assumed that Rodriguez had ac6uired one-half of the litigated fishponds. n the circumstances, appellant<s cause has become a stale demand and her conduct placed her in estoppel to 6uestion the Validity of the transfer of her properties. ;'anila, et al. vs. 1alvan, et al., 1.R. "o. D-#-$05, 'ay #,, )*%5B 3erez vs. ?erranz, 5 3hil. %*$-%*%=. n vie& of the foregoing, the decision appealed from is affirmed. Costs against appellant Concepcion Felix Vda. de Rodriguez. @o ordered.

+a,alintal, -en&zon, ..(., /aldi$ar, Sanc!ez, Castro, An&eles and 0ernando, ..., concur. Concepcion, C... and *izon, .., are on lea$e. Foo&'o&() 9rticle )-0) of the Civil Code of )((*, in force &hen the assailed contracts &ere executed ;)*-,=.
)

@ee also Diguez vs. Court of 9ppeals, )0# 3hil. $()$(#B 3erez vs. ?erranz, 5 3hil. %*$.
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